Street lights may have to be switched off and libraries closed down if NHS
funding is not diverted to help councils pay for elderly care in
communities, leaders have warned.

The system of care for elderly and disabled people is facing financial collapse unless billions of pounds are handed over, council chiefs have warned George Osborne.

Local government heads say they would have to consider switching off street lights or closing parks just to maintain their legal obligation to provide care unless specially protected health budgets are shared.

The call comes in a memo to the Chancellor, seen by the Daily Telegraph, from the leaders of 370 councils as he prepares to finalise the next round of Government cuts.

They argue that the amount of money spent on social care has already been slashed by a fifth in less than three years and disclose that they are preparing to reduce budgets further.

But they warn that, while they have been able to save most of that money through so-called “efficiencies” – such as squeezing the amount they pay to care homes and other contractors – they are running out of ways to cut costs.

The only alternative will be to close down some care services or ration care even further than at present, limiting it only to those in the most dire situations.

They warn that doing so could seriously undermine the Government’s flagship policy of “integrating” health and social care and ultimately heap more pressure on the NHS as older people turn to hospitals because they cannot get the help they need at home.

A shortage of specialist care in the home is already being blamed for high rates of “bed-blocking” in hospitals.

George Osborne agreed for £2 billion to be transferred from the NHS to the social care sector in his previous spending review.

But much of that money has gone on simply propping up the system which is under severe pressure because of the rapidly ageing population. Demographic pressures alone increase the cost of providing care by an estimated £400 million a year.

Now the Local Government Association (LGA), which drew up the report, is calling for fundamental change in the way money is allocated and an end to the special protections that the health service budget enjoys.

But hospitals chiefs warned last year that patients would suffer if they are forced to share more of heir budgets with the social care sector.

“Social care is one of the things that you lie awake at night worrying about,” said Sir Merrick Cockell, the Conservative leader of Kensington and Chelsea council in London, who is chairman of the LGA.

“It is one of the most serious responsibilities that we have got and we take that very seriously but we know that we can’t really restrict the spending any more.

“Most of us are pretty well at the 'critical’ level, as far as criteria for care go, we know we’ve got an ageing population and care is becoming more expensive, all the pressures are there.”

He added: “If Government doesn’t give us what we hope on sharing and integration at national and local budget level, the services like libraries, like leisure centres, like the way that parks are kept or indeed street lights being on all through the night, councils will have to look at saving money on those things.”

In its submission to the Chancellor the LGA discloses that it knows of 86 councils in England which already estimate that their projected income will meet less than 85 per cent of their spending commitments in three years time.

It says that internal research shows that almost two thirds of social services chiefs are considering further reducing the number of people receiving care – something which has already been tightened up in recent years.

Half of them actively expect to see poorer access for elderly and disabled people within the next two years.

The NHS budget for England is currently around £109 billion a year while social care, on which 1.2 million frail or vulnerable people rely, receives just a tenth of that.

While health budgets have been given special protection under the Coalition, councils have seen their budgets cut by a third since 2010.

Although they have attempted to shield care for the elderly and disabled from the impact of budget cuts and save money by “efficiencies” rather than closing services, spending on social care budgets has nevertheless been slashed by a fifth already.

The LGA calculates that it will be trimmed by at least another five per cent over the next three years. But if the cuts to local government are in line with those expected by many Whitehall departments then the extra reductions could be twice that level.

“We need to recognise that there are now very few pure 'efficiencies’ left to be found in adult social care,” the memo warns.

“Many efficiencies identified by councils now inevitably include an element of cuts to services or tightened eligibility criteria.

“Total savings stand at £2.68 billion over the last three years, a total of 20 per cent savings.

“The Government must exercise caution when assessing the scope for further immediate efficiencies, particularly as the requirement for immediate savings jeopardises longer-term efficiency programmes.”

Councils are preparing for savings in social care of two per cent this year, 1.5 per cent next year and another 1.5 per cent in the 2015 to 2016 financial year.

“This results in local authority projected income in 2015/16 accounting for approximately 85 per cent of estimated spend,” the memo adds.

“Any government assumptions of further efficiencies will therefore leave a bigger gap that will have to be fixed by cuts.

“Adult social care would not be immune to this, which would exacerbate the pressures outlined above.

“Reducing spending on prevention and early intervention is one of the only places left to look for further savings, this is counter to the policy direction set out in the care and support White Paper.

“It is only by implementing effective integration across the country that we can expect to drive out further large scale genuine efficiencies from the health and care system.”

Sir Merrick added: “Councils are facing a very real crisis in providing even the most basic care to the most vulnerable members of society.

“The current system promotes an inefficient use of taxpayers’ money but more worryingly it also reduces the quality of care people receive.

“Fixing the financial crisis engulfing adult social care has to be a priority, not doing so could see councils start to fail their communities.”